EU lawmakers split over whether to start trade talks with U.S.

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STRASBOURG (Reuters) - European Union lawmakers failed to offer a view on Thursday on whether to start negotiations with the United States on removing tariffs for industrial goods, a move designed to ease trade tensions between them.

FILE PHOTO: U.S. and European Union flags are pictured during the visit of Vice President Mike Pence to the European Commission headquarters in Brussels, Belgium February 20, 2017. REUTERS/Francois Lenoir

In a confusing vote, the European Parliament passed by a narrow majority a series of amendments against beginning talks, but then voted down its own resolution on the topic, meaning in effect it took no view.

The resolution would not have been binding, but parliament will have to approve any deal agreed and EU governments said they wanted to hear the view of lawmakers before deciding.

The original text, broadly supported by center-right parties but opposed by the left of center, had set out conditions for negotiations: to include cars, exclude agriculture and be suspended if Washington imposes new punitive tariffs.

EU steel and aluminum are already subject to protective U.S. import duties.

The two sides ended a stand-off last July, when U.S. President Donald Trump agreed to hold off imposing tariffs on EU car imports while the two sides looked to improve trade ties.

Since then, U.S. soybean exports to the EU have more than doubled and the two sides have discussed how they might agree on product standards and boost U.S. energy exports to Europe.

The trickiest part, though, is the wish expressed in July to remove tariffs on “non-auto industrial goods”. The EU has said cars should be discussed; the United States has set out a long wish list, including agricultural products — a no-go area for Europe.

Critics say the EU should not be negotiating while it still faces metal tariffs and the threat of car import duties. They also complain that the EU’s latest trade deals include provisions on climate change, which this would not.

In fact, there are two proposed negotiating mandates - one on tariffs, the other on making it easier for companies to have products tested and cleared for sale across the Atlantic.

EU governments failed to agree at a meeting last month, with Germany keen to push ahead, but France reluctant.

The EU is aware that Trump’s patience is not infinite and that he could impose steep tariffs on imported EU cars and auto parts in the coming months.